This autumn sees trust, corporate and fund services business ZEDRA take on private equity backing from Corsair Capital. Bart Deconinck, who will become Executive Chairman of ZEDRA on completion of the deal, tells us what this new phase of development means for the three-year-old firm
When Businesslife spoke to you in 2017, it was early days for Zedra. What have you been most proud of since then?
We started in 2016 with the acquisition of Barclays Bank’s trust and fiduciary business. The number of staff, our revenues and the number of jurisdictions in which we are present have all doubled since then.
Wealthy families are becoming more and more demanding in terms of what you can deliver for them. You cannot say any more, “I’m going to do one piece of the puzzle” – you have to be able to do everything.
In the past three years, we’ve been able to develop a set of services that allows us to do more for existing clients – for example, we’ve added fund administration services and corporate work to our skill set – and that has a large part to do with the doubling of our revenues.
The second significant achievement over the past three years has been the building of our brand. More and more, leading advisers are inviting us to beauty contests for their big clients and we recently won silver in the Digital Brand of the Year category at Citywealth’s annual Brand Management and Reputation Awards.
We’re only three years old, so to be worthy of competing against 30-year-old brands shows that we’ve done a pretty good job of building the Zedra name.
One other thing you stressed when we last spoke was that you would be growing Zedra without private equity backing. What’s changed?
Zedra was growing fast and if we wanted to expand further, we were going to need more resources and a different network. Our majority owners at the time – the Sarikhani and Nielsen families – took the decision to ask me to try and find a partner who understood our business and could help move the business to the next level.
We didn’t want to do an auction process where we were simply looking for the highest price. We reached out informally to various players to find a backer similar to us, and we bumped into Corsair Capital, the old JP Morgan private equity house.
There are three things about Corsair that make it the right partner for us: first, it’s small and nimble – you get to meet everyone there, from the Chairman to the CEO to the Managing Director; second, it only invests in financial services companies, so it understands the constraints and sensitivities of operating as a regulated business; and third, its investors are wealthy families, which offers a perfect synergy with our own clients.
There is another potential advantage here – some of the organisations in which Corsair invests could be useful partners or conduits for business for Zedra.
For example, in the UK, Corsair has a stake in Currencies Direct, which is a payment and currency conversion services business, and we’re already talking to the firm to see how that relationship can be of benefit for our clients.
The corporate governance arrangements are also very balanced. The supervisory board will comprise two people from Corsair, two people from Zedra – me as Executive Chairman, and our CEO – and one independent whom we nominate at Zedra. This is a partnership and not a private equity firm coming in and saying “We’re going to take control”.
What else is Corsair Capital going to bring to the table?
The additional firepower Corsair provides will enable us to grow and expand our active wealth services further. There are a couple of priorities here.
First, we need to keep deepening our service offering, particularly in the area of fund administration. We now have fund activity in Jersey and Guernsey and we will soon have fund activity in Cayman, when the acquisition of JP Integra closes, but Luxembourg is still a gap and we have to invest there.
Second, we need to invest in markets where wealth generation is high. We are already very good in the Middle East, but there are three other markets where wealth generation is certainly much higher than in Europe.
In Asia, we have offices in Singapore and Hong Kong, but we have much more to do there so we are actively hiring. In Latin America, wealth generation combined with geopolitical instability is creating a lot of opportunities for us, so we have opened an office in Miami to cater for this region. But, again, we have much more to do there.
A country where things are really taking off is the US, so we are expanding our Miami presence with new hires. This year, we hope to be able to announce a US acquisition in the wealth structuring space.
Can we expect more acquisitions by Zedra with this new firepower behind you?
What we are not going to do is buy simply to bulk up. Whatever action we take will be to make us better.
Interben is an interesting acquisition, for example. It’s not large but a decent-sized trust company owned by Storebrand, which is the biggest Scandinavian insurer. Our CEO was in Oslo recently to talk to the CEO of Storebrand. Suddenly, you open up a relationship there with a live insurer who has thousands of wealthy families on the books – Interben has given us access to a vast market in Scandinavia.
So acquisitions should add something strategic. In our industry, too many times acquisitions are made just to bulk up.
It’s also important to stress that part of our acquisition strategy is to share knowledge generously within the company so that each jurisdiction understands what the other is able to offer to the client and can seek help from each other. At the end of the day, the client will see the difference because they will benefit from the full scope of services within the company.
How might clients see things change under the new ownership model?
Clients will not see changes in the day-to-day handling of their business or in price increases – that’s a decision we’ve taken – but all these investments will enable us to provide a better, faster service.
One investment is in IT. We’re now considering rolling out a new system across all jurisdictions that will offer additional features to client who want to access an overview – and track progress – of their investments via a login portal.
You mentioned Zedra’s focus on ‘active wealth’ – a key differentiator for the firm in the market. Tell us more about this.
We don’t want to be all things to all people everywhere. Our focus is on active wealth. What that means is we work with families that have wealth and employ it in an active way, whether that be investing it in their own businesses or properties or whatever, and we support them with the services they need to do this. It can be funds, corporate vehicles, trust structures or foundations, escrow arrangements and so on.
We don’t organise our firm around business silos – we focus on the active wealth of our clients and our different services are subordinated to that. So from a client’s perspective, they can get everything they want from one single contact, wherever they are in the world.
As you move into this new partnership with Corsair Capital, which is subject to regulatory approval, what qualities do you want people to associate Zedra with?
I want people to think of Zedra as being modern, fast yet reliable, international, sensitive, entrepreneurial, bringing something of value to the table. We’re not old school, we’re new school.